Current account fraud hits record high

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More people than ever are lying about their circumstances when trying to open a current account, new figures show.

Experian says that 44 in every 10,000 current account applications were fraudulent in the first three months of 2012 – a significant rise from 23 in every 10,000 in the last three months of last year.

The vast majority of current account fraud was committed by people knowingly lying about their circumstances to obtain services they may not have been eligible for.

Some 38% of current account frauds were due to individuals attempting to hide adverse credit histories when opening current accounts or applying for overdrafts.

A further 39% of current account fraud involved product or payment abuse, which included people knowingly attempting to make payments with insufficient funds in their accounts.

Nick Mothershaw of Experian said that the problem of identity fraudsters seeking to open accounts in other people's names also remained, as they are used as a means for money laundering or as a springboard to attempt fraud with products such as loans and credit cards.

The surge in current account fraud meant that 19 in every 10,000 applications for financial services were found to be fraudulent in the first three months of 2012, up from 16 in the last quarter in 2011.

Credit card fraud and attempted insurance fraud also both increased during the first quarter of the year.

"Credit cards have seen a resurgence in identity fraud, while a growing number of financially stressed individuals consider misrepresenting their personal or payment information when applying for insurance, contributing to a significant fraud upswing in the first quarter of 2012," added Mr Mothershaw.